Not-for-Profit Charter Schools vs. For Profit Charter Schools

Ever since Parent Revolution expressed its concern about a proposed Michigan “Parent Trigger” bill allowing for-profit charter schools to participate, we have received a massive amount of criticism from conservatives within the education reform community.

The latest comes from Rick Hess, someone for whom we have a great deal of respect as an intellectual leader in the education reform movement. We think it’s healthy to engage in a genuine and robust dialogue around these issues with really smart people. Too often – especially when debating defenders of the status quo like Randi Weingarten and Dianne Ravitch -- debates deteriorate into conspiracy theories, personal invective, and knocking down absurd straw man arguments then declaring victory. We respect Rick and appreciate the opportunity to engage in a thoughtful and serious dialogue.

At its core, Rick’s recent critique argues Parent Revolution opposition to for-profit charter schools abandons our fundamental values around empowering parents to put children first. In essence, we are putting blind adherence to our own progressive ideology above our commitment to put children first. Nothing could be further from the truth. We hope this piece explains exactly how our position is grounded in the fundamental values that led to the creation of Parent Revolution and the Parent Trigger law in the first place.

At Parent Revolution, we believe transformative change is possible when kids are put first in every single decision made within a public school system. To accomplish this, we believe organized, empowered parents are the key to putting kids first. When parents are organized and have power, they can hold the entire system accountable to serve the interests of their children, rather than the interests of powerful adults.

That is why we invented the Parent Trigger law. Choice is a powerful lever for change, whether it is individual choice (escaping a failing school for example) or collective choice (using parent power to transform entire schools or school districts).

Where we differ with Rick is whether charter school operators brought in to transform a failing school should be not-for-profit or for-profit. In a recent piece (Pundicity, 10/22/2012), Rick says our recent op-ed in the Detroit Free Press is “yet another reminder that even the ‘reform’ ranks in K-12 are filled by ideological progressives with an aversion to private enterprise that would be considered radical in almost any other sector…when it comes to K-12, however, reformers routinely engage in gratuitous shots at for-profit ventures as a plaintive effort to placate the establishment and fend off attacks for the left.”

Because we believe children need to be put first in every decision, it is far better to have non-profit organizations – accountable to parents, taxpayers and a stated mission – than a for-profit organization, which by definition is accountable first and foremost to investors and shareholders --handed the keys to a failing public school. We do not accept the premises that “tax status” should simply be an irrelevant concern. Built into different tax statuses are a wide-variety of incentive structures and accountability regimes.

Rick acknowledges for-profit ventures are incentivized to “cut corners and to be overly aggressive in pursuing clients.” That is a basic concern for us, as well. When driven by a focus on generating profit for investors and shareholders, the motivation is to cut costs anywhere and everywhere to maximize that profit.

The conversation Rick plays out – where we stand in the way of parents who want to bring a great for-profit operator in to run their school – is built upon the false premise that a belief in genuine parent empowerment requires one to support any group of parents in any endeavor they undertake, with no government regulation of any kind. We believe deeply in parent empowerment – that’s why we conceived the Parent Trigger law, fought to pass it, and implement it against the most powerful opposition in the nation – but we also believe there is a place for regulation and rules in any system of parent choice and empowerment. If parents somewhere wanted to bring in a school operator abolishing English and math instruction in favor of a curriculum focused only on creationism, we suspect Rick would join us in opposing such an effort.

Every Parent Trigger law in the country, including California’s, has rules and regulations governing its use, most of which we strongly support as an important part of creating a workable system of parent empowerment. The question becomes what types of regulations are necessary – and where society draws the line. That is the context in which we must think about the inclusion or exclusion of for-profit operators in any Parent Trigger law.

We believe the introduction of a new stakeholder group that school operators are accountable to – shareholders seeking profit – will make the public school system less oriented towards putting children first rather than more so. That dynamic is very real, and troubles us when such organizations are asked not just to serve food, manufacture pencils or publish textbooks, but take control of the educational destiny of an entire school.

Our critics often acknowledge these concerns, but push back with the argument of scale: for-profit firms can attract capital and scale faster than non-profits. That is a legitimate argument. . We have far more parents coming to us for help than we have quality non-profit charter operators willing to turn around failing schools. But we don’t believe the future of the Parent Trigger movement is rooted in finding an outside charter operator to turn around every failing school in America. We believe Parent Trigger is more than just a new law; it’s a new paradigm – an entirely new way of thinking about public education and education reform. It’s not about charter schools vs. district schools – it’s about giving parents power over the education of their own children. Parent Trigger makes public schools more public by giving parents a seat at the table, whether it’s about triggering a charter conversion, using Parent Trigger as leverage to bargain for kids-first in-district reform, or building a broader social movement rooted in kids-first change for districts, states and even the nation.

Ultimately, with or without a profit motive, public schools receive the same shrinking amount of money to run schools. In the context of a for-profit charter operator, parents need to ask: where does the profit come from? What line items at the school get cut to pay the shareholders their earnings?

Of course, there will always be public school services contracted out to private enterprise: school supplies; instructional materials; information technology resources; gasoline for school transportation; and so on.

However, there is a significant difference between contracting with businesses for these discrete, specialized services, and allowing a business enterprise to turn an entire public school into a for-profit venture.

At Parent Revolution, our belief in putting kids-first leads us to support some of the same free market concepts embraced by Rick and our other critics: common sense accountability; parent empowerment and choice; and augmented local autonomy. Where we respectfully disagree is around the idea that the profit motive can serve shareholders without trumping the interests of parents and children.

Comments

It's clear (to me, at least) that for-profit charter schools are less palatable than non-profit charters, or n0n-profit private schools, for that matter, which can be defended by the arguments of both Parent Revolution and Rick Hess. But it's a separate question to ask, "Should for-profit charter operators be outlawed, or excluded from the considerations of parent groups appealing to organizations like Parent Revolution from help?" If their only choices were sending their children to a perennially failing school like McKinley (or old Locke) and giving a for-profit charter operator a shot at transforming the school, would Parent Revolution support taking away the power of parents to consider the latter alternative?

I should have added "voucher-supported" in front of "non-proft private schools" above: I think the Parent Revolution's emphasis on spending every dollar directly on serving students supports the non-profit part of the argument, while Mr. Hess's emphasis on maximizing parents' empowerment to choose supports vouchers.

The article above, "Not-for-Profit Charter Schools vs. For Profit Charter Schools", unless intended as satire, serves as evidence supporting Mr. Hess's contention. Read his article, "Where Parent Revolution Lost Me" -- www.frederickhess.org/2012/10/where-parent-revolution-lost-me -- and make your own analysis.

For profit would make sense for there to be a return on initial investor start up money and subsequent capitalization costs. However there seems to be a lot of start up money available from state and federal governments and other non-profits. On the other hand a for-profit is much more attuned to customer demands. If a for-profit does not provide an excellent education, customers will leave for better options and the investors will lose their money. For-profit or Non-profit? When in doubt leave it to the parents to decide for their own children. After all, parents are the leaders of this revolution.

Alan: I agree with you that freedom to choose is intrinsic to Liberty and Justice. Usurpation of that by monopolies, whether controlled by politicians or not, has a proven record of failure.

profit maximization is the short run or long run process by which a firm determines the price and output level that returns the greatest profit. Click the link below now for further reading. profit @ www.fixguy.com

Not much talk here about the homeschoolers. To really get on we have to lose this old way of "educating". Our system s archaic ooutmoded and no longer usefull. Forthe last 60 years we have poured more money into this thins with poor results. It is a new day let teachers go into there ow business and compete in the marketplace for sutdents. The internet is the classromm of the present and future. The whol NEA and federal programs should be scrapped. It is a black hole.

Kevin: Here's a more comprehensive analysis -- www.aei.org/article/education/private-enterprise/the-irrational-fear-of-for-profit-education/ -- "The irrational fear of for-profit education" which supports your (our) view.

Good post and thanks for sharing this!

I kind'a like the idea of "non-profit organizations – accountable to parents, taxpayers and a stated mission". They -- parents especially -- can help the kids in a more personal touch and the school grows more healthily.

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